SURIGAO CITY (MindaNews/15 July) — A lawyer-councilor has warned the city government against its planned auction of a mothballed nickel refinery plant on Monday which can result to a legal imbroglio in the future.

Councilor Jose V. Begil, Jr., chair of the Committee on Good Government, warned Mayor Ernesto Matugas against pursuing the public auction of the redundant assets of Philnico Industrial Corporation (Philnico) in Nonoc Island here despite a court order granting its petition to have the assets auctioned off.

On June 15 this year, Judge Victor A. Canoy of the Regional Trial Court Branch 29 granted the city the authority to put on public auction the facilities on the basis that the Privatization and Management Office (PMO) claim does not hold legal basis and factual basis.

“The city may proceed with the public auction of the redundant assets subject to the observance of the proper procedures under Section 258 of the Local Government Code,” the nine-page resolution read.

The city government set the public auction for the equipment on July 16 at 3 p.m. at the Surigao City Cultural Center.

On Sept. 15, 2011, the PMO filed a petition for a writ of preliminary injunction blocking a public auction that was supposedly scheduled on Sept. 19 to October 26, last year.

The legislator’s warning came amid reports that Mayor Matugas allegedly entered into a contract with a Korean-based company which will allegedly purchase the scraps for P200 million.

Matugas was reportedly going to get a 30% commission from the supposed transaction, an allegation he denied.

In a hastily called press conference attended by all city department heads on July 11, Matugas explained he wanted to enlighten the public “on the real issue.”

But Begil, who was later identified as the source of the radio reports, told reporters that he talked about the planned auction in a meeting with the mayor and that the mayor informed that a Korean company was interested to buy the scrap and offered to give a 10% commission, not 30% as reported.

Matugas confirmed the meeting with Begil but denied having said that he received the alleged commission. He said a Korean firm was willing to offer a 10% commission for the supposed transaction but the mayor emphasized that he was not interested in the offer and emphasized that the public auction had not taken place.

In a report aired over RPN-DXKS and anchored by the city’s media consultant Emmanuel Kong, Matugas expressed his dismay. “As public officials dil iunta dajon maghimo nan storya kun waya pa ini maklaro kay madaot man sab kitajaon” (Public officials, he said, should not make pronouncements without verifying as this would destroy a person’s reputation).

Begil said he intended no malice and stressed he supports the local government initiative to generate funds through the planned public auction.

But he expressed his legal opinion that it is better to put on hold the planned auction while there are still legal issues confronting it.

The Coalition of Surigaonons For Good Governance Transparency and Accountability (COSSUG-TA), an anti-corruption watchdog, through its spokesperson, lawyer Victor Bernal, criticized the city’s move as a mere “cover up” to promote the “business interest” of the city.

Bernal, a former board member of the provincial legislature, perennial critic of the Matugas political clan and legal counsel of Philnico, said he wondered why the city government had complained that the plant is a health hazard more than 25 years after it stopped operating.

The Philnico legal counsel asserted that there are no records of deaths in the area due to ammonia leakage.

Before the present political ruckus erupted, the Sangguniang Panlungsod Committee on Environment conducted an ocular inspection upon receiving reports of alleged ammonia leak from the tanks of the plant. The committee later said the report was false.

The plant, a subsidiary of Philnico, was foreclosed by the government in1984 for failing to pay the loan it obtained from the Philippine National Bank and Development Bank of the Philippines. But it continued to operate despite the foreclosure order and only closed down in March 1986 due to losses.

Bernal said Philnico is a private entity and that if the government has complaints about its alleged health hazard, Philnico should have been informed or a petition should have been filed in court to declare it a public nuisance.

He said it is big business interest, not ammonia or health reasons but the value of the plant’s scraps, that is the “real reason.”

Earlier, city health officer Dr. Emmanuel Plandano said the tanks containing ammonia are already old and could collapse anytime, causing health risks to the environment and the people in the area.

Matugas said the city’s move is pre-emptive and not reactive. (Vanessa Almeda/MindaNews)

Surigao Today

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